Correlation Between MFS Government and John Hancock
Can any of the company-specific risk be diversified away by investing in both MFS Government and John Hancock at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MFS Government and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Government Markets and John Hancock Financial, you can compare the effects of market volatilities on MFS Government and John Hancock and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MFS Government with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Government and John Hancock.
Diversification Opportunities for MFS Government and John Hancock
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MFS and John is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding MFS Government Markets and John Hancock Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Financial and MFS Government is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MFS Government Markets are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Financial has no effect on the direction of MFS Government i.e., MFS Government and John Hancock go up and down completely randomly.
Pair Corralation between MFS Government and John Hancock
Considering the 90-day investment horizon MFS Government is expected to generate 3.28 times less return on investment than John Hancock. But when comparing it to its historical volatility, MFS Government Markets is 2.79 times less risky than John Hancock. It trades about 0.03 of its potential returns per unit of risk. John Hancock Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,767 in John Hancock Financial on September 15, 2024 and sell it today you would earn a total of 923.00 from holding John Hancock Financial or generate 33.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MFS Government Markets vs. John Hancock Financial
Performance |
Timeline |
MFS Government Markets |
John Hancock Financial |
MFS Government and John Hancock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MFS Government and John Hancock
The main advantage of trading using opposite MFS Government and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Government position performs unexpectedly, John Hancock can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in John Hancock will offset losses from the drop in John Hancock's long position.MFS Government vs. MFS Investment Grade | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select | MFS Government vs. Federated Premier Municipal |
John Hancock vs. MFS High Income | John Hancock vs. MFS High Yield | John Hancock vs. Blackrock Muniholdings Quality | John Hancock vs. MFS Government Markets |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Global Correlations Find global opportunities by holding instruments from different markets |